2013 (4) TMI 72 - AT - Service Tax

Demand of Service tax/Penalty - appellant are not contesting the demand and seeking waiver of penalty imposed u/s 78 Held that - there was investigation against the assessee in April 2002 and there was confirmation of demand of service tax and imposition of penalties on the identical activities undertaken by the appellant. Under these circumstances, the plea of ignorance has to be dismissed as totally devoid of any merits. Tribunal find from the impugned order of the Commissioner (Appeals), that the basic reason for setting aside the penalty under Section 78 is the Tribunal s decision that when Section 78 penalty is sustained, there is no justification for a separate penalty under Section 76. - Imposition of penalty confirmed - decided against the assessee.

Summary

Issues:
- Appeal against the order of the Commissioner (Appeals) dated 8.01.2010
- Confirmation of service tax demand, penalties under different sections, and reduction of demand on appeal
- Applicability of penalty under Section 78 and invocation of Section 80 of the Finance Act
- Dispute regarding cooperation in investigation and previous offence leading to demand of service tax

Analysis:
The appeal before the Appellate Tribunal CESTAT Bangalore involved a dispute arising from the order of the Commissioner (Appeals) dated 8.01.2010. The original authority had confirmed a service tax demand of Rs. 3,73,208/- along with penalties under various sections for the period April 2002 to December 2005. On appeal, the demand was reduced to Rs. 3,10,047/-, with certain penalties being set aside while others were upheld. The appellant sought waiver of penalty under Section 78, citing being a small-time service provider to specific institutions and not collecting service tax from most recipients except one. The appellant also referenced a Tribunal decision in a similar case to support their argument.

During the proceedings, the appellant's representative argued that the penalty under Section 78 should be set aside, emphasizing the appellant's limited operation and delayed recovery of service tax from recipients. On the other hand, the Superintendent (AR) highlighted the appellant's lack of cooperation in the investigation and a previous offence resulting in a demand for service tax. The Superintendent contended that the circumstances did not warrant invoking Section 80 of the Finance Act, distinguishing the case from the precedent cited by the appellant.

After considering the submissions and reviewing the records, the Tribunal found that the appellant's plea of ignorance regarding the service tax obligations was untenable due to a previous investigation and penalties imposed for similar activities. The Tribunal noted that the absence of service tax collection by the appellant did not justify invoking Section 80 of the Finance Act. The decision to set aside the penalty under Section 78 was based on a previous Tribunal ruling, which did not support a separate penalty under Section 76. Consequently, the Tribunal rejected the appellant's appeal, concluding that there was no merit in their arguments based on the facts and legal precedents presented during the proceedings.